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The Federal Fair Labor Standards Act (FLSA) provides important protections to workers in terms of their pay and hours worked. This law presents challenges to employers in their understanding of its many regulations and how to apply them to their workforce, especially in light of the changes in the workplace caused by the COVID-19 pandemic.

Marzano HR Consulting works with businesses in many different industries by helping them understand the FLSA. Below are some common FLSA mistakes.

MISTAKE #1: MISCLASSIFIED EMPLOYEES

A common FLSA mistake is the misclassification of employees as being exempt from overtime. To be exempt in most circumstances, an employee: (1) must be paid a salary equal to at least $684 per week; and (2) must perform duties that fall within the criteria for an executive, administrative or professional employee. The duties tests for these so-called “white collar” overtime exemptions focus not on the employee’s job title but on their actual primary duties.

MISTAKE #2: SALARY PAY DEDUCTIONS

Exempt employees must be paid on a salary basis and receive the same salary for every week in which they perform any work. There are some exceptions to this rule, some of which include full day deductions for absences from work for personal reasons and full day absences for illness or injury.

Cutting of salary or reducing hours due to COVID-19 can lead to overtime exemption problems. A reduction in pay that is tied directly to a reduction in hours may be interpreted as an hourly rate of pay, rather than a salary.

MISTAKE #3: WORK “OFF THE CLOCK”

Employees who do not fall within any of the tests for exempt status must be paid for all hours worked and must be paid one-and-one-half times their regular rate of pay for all hours worked in excess of 40 in any work week. All the time between an employee’s first and last “principal activity” would be compensable working time.

Given the amount of employees working from home due to COVID-19, employers should ensure they keep track of and pay non-exempt employees for all work performed remotely.

MISTAKE #4: PAID AND UNPAID BREAKS

Meal breaks less than 30 minutes in length must be paid. Problems often arise when employees eat lunch at their desks and continue to work through the meal period.  An employer most likely will be responsible for paying the employee for time spent working during their mealtime.

Remote work due to COVID-19 may tempt employers to automatically deduct a lunch break from employees’ work hours. Employers must pay non-exempt workers for all hours worked. An employee who answers a client’s call after their usual working hours or who checks their email over the weekend, must be paid for that working time.

MISTAKE #5: TRAVEL TIME PAY

If the employee must report to a designated location to pick up equipment or supplies before reporting to their regular worksite, that employees’ working time starts upon arrival at the designated location.

Where an employee is required to travel to a different city for a one-day assignment, the travel time is considered paid time since it is not ordinary work commuting time.

For travel that involves an overnight stay, travel time is compensable if it occurs during the employee’s regular working hours, seven days a week.

MARZANO HR CONSULTING

Don’t let your business get caught in these common wage and hour traps. A complaint by a disgruntled employee to the Department of Labor could trigger a DOL audit. If the DOL comes looking for FLSA violations, you will want to be sure that your employees have been correctly classified and paid all wages due them.

Marzano Human Resources Consulting can review your wage and hour practices to ensure your business is in compliance with federal and state employment regulations. For exemption testing, if you don’t have comprehensive job descriptions, we have a job information questionnaire we ask businesses to complete which provides us needed insight when making a job classification assessment.


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